2.7.12 Policies, programmes and projects may give rise to distributional effects, for example, between people of different incomes, ages, genders, religions, ethnic groups, health states, skills, or locations. Expenditures or other policy proposals often lead to both gainers and losers, and information on how the costs and benefits are distributed among different individuals, organisations, or sectors of the economy can be very important. In general, proposals that deliver greater net benefits to lower income groups should be rated more favourably than those that benefit higher income groups.
2.7.13 Significant distributional effects should be identified and, as far as possible, quantified in appraisals and evaluations. How the options differ regarding these effects should be analysed in much the same way as for other non-monetary factors. For instance, where an impact statement is being used, the distributional impacts should be summarised in it, together with those of all the other non-monetary factors. Alternatively, they may be scored as criteria in a weighted scoring exercise.
2.7.14 The Green Book lays greater emphasis upon assessment of distributional impacts. Paras 5.33 - 5.41 and Annex 5 of the new Green Book give general guidance on the subject. SGHD endorses this guidance.
2.7.15 The Green Book includes a method for applying explicit distributional weights. It is only applicable in cases where benefits to income groups are actually valued monetarily, and this can require a substantial effort in terms of information collection and analysis. Judgement of the appropriate approach should be informed by consideration of the scale and significance of the distributional impact of the proposal in view; and the ease or cost-effectiveness with which distributional impacts can be measured.